Eric Jhonsa
Technology Portfolio Manager at Dutch Asset
Chip-equipment makers look cheap given supply-chain shortages and demand visible toward 2029-30. At Semicon West, no one raised demand concerns; suppliers' suppliers lacked capacity, while several high-quality names trade below the S&P multiple. Per Lynx's KC, customers are asking about delivery three to four years out. For Lam Research's report, bottlenecks, pricing and visibility beyond 2027 matter more than demand. x.com x.comÂ
Semiconductor equipment subsystem makers Ichor and Ultra Clean are the deeper edge in AI capex, since subsystems tend to outperform when the wafer fab equipment cycle expands. Both sell directly to Applied Materials and Lam Research. Ichor is a $1.9B pure-play gas and chemical delivery supplier and a high-beta play, while Ultra Clean, at $3.3B with services, is more stable but pulls the same lever. x.comÂ
Financing strain threatens smaller AI-related plays. Elon Musk says debt markets have nearly closed to firms without substantial non-AI-data-center revenue. Neoclouds, energy, HVAC, electronics and builders will be a much smaller field in a year; its 'guppy' plays can be shorted here toward zero. CoreWeave, IREN and Vertiv look troubled, perhaps Nebius; Ouster, Applied Digital, Ultra Clean, Cipher Digital, WhiteFiber, TeraWulf and IPG Photonics too. x.com x.comÂ
Ultra Clean's earnings outlook and valuation leave it with the cleanest upside in semiconductors despite an ATM overhang. After a 67% stock correction, it trades at 8-10x forward EPS a few years out and is expected to generate $500M in EBITDA over the next three years. The ATM could dilute shares by 2% per quarter for two quarters; discounted 0% 2031 converts and potential convert buybacks offer a path to deleveraging. x.comÂ
Lam Research's record results suggest the equipment cycle is not ending despite its stock selloff. Revenue reached $8.22B, up 54% year over year and over 20% sequentially, while EPS rose 75%; ASML and TSMC also report customers needing more tools. Overweight with a $355 target and 35% upside, but the selloff is a gift only if Lam guides December higher. x.com x.comÂ
Quantum computing's suppliers get paid whoever's machine wins, as steel mills did while most railroads went bankrupt. Chips, test benches, cryogenic freezers, inspection, lasers, vacuum gear and light must be bought regardless. Washington signed nine letters of intent worth about $2.013 billion before any machine was built, half to the one recipient with a working foundry. Only one name is in its buy zone; the rest await lower prices. Two flat quarters of cryogenic and control orders ends it. … Show more
Slowing AI capital spending keeps the semiconductor growth scare in play. Meta's cash flow is negative and Lam Research's capex is slowing, further evidence as the sector faces a growth-to-value rotation and a Fed pause next week. x.comÂ
Lam Research's non-China demand growth and steady earnings estimates make its lower multiple a rebound setup if its guide holds. China's revenue share fell from 43% to 26% as Taiwan and Korea grew, while the fiscal 2027 earnings multiple fell from about 37x to 28x on nearly unchanged estimates. An in-line quarter and December guide near consensus would probably lift the stock; a guide below $8.5bn would back the selloff. x.comÂ
US semiconductor equipment makers are the sturdiest picks-and-shovels play, because any industry expansion needs equipment first, giving them a place in every bull market. In the latest US tech selloff, chip and optical stocks fell broadly, yet equipment names jumped double digits at the open and nearly all closed higher, a clear vote by investors. The group spans Applied Materials, Lam, KLA, MKS, Entegris, Onto, Nova and ACM Research, with Axcelis, Ultra Clean and Veeco strongest. x.comÂ
Next-generation AI systems could double wafer demand, keeping the long-term outlook compelling for semiconductor equipment makers. Applied Materials targets more than $12 billion in services revenue and roughly 40% operating margins by 2030; management expects over two points of share gains and potentially more than $5 billion in advanced-packaging revenue, driven by HBM and AI demand. Bullish on Applied Materials, Lam Research, ASML and KLA. x.comÂ